The US markets experience 3 years of decline after a very long haul of
huge gains. Now the markets seem to be coming back:
S&P 500
1988 16.6%
1989 31.7%
1990 -3.1%
1991 30.5%
1992 7.6%
1993 10.1%
1994 1.3%
1995 37.6%
1996 23.0%
1997 33.4%
1998 28.6%
1999 21.0%
2000 -9.1%
2001 -11.9%
2002 -22.1%
2003 28.7%
2004 10.9%
http://www.hedgefund.com/indices/Historical_Indices/Yearly/usyrs/usyrs.htm
You will see a very similar trend for any major stock index. And as
you can see, 2003 and 2004 both showed respectable gains for the
market. The average over the last 80 or so years has been around 11%
gain per year and I see no reason to not expect that trend to continue
over the next decades (assuming no nuclear assaults or major world
turmoils).
When you sell short, you are simply betting that a company's stock
will go down while someone else is betting that the stock will not go
down. And in the process someone is making commission off of both
parties. So on average you will lose money (the ammount of the
commission) selling short. However, by buying an index fund you will
make an average of 11% (minus any commission ... which is usually very
low for index funds, check Vanguard for no-load, approximately .25%
expense ratio funds).
Invest early, invest aggressively (if you're investing early), but
invest smartly. A smart investment over time WILL grow at a good
rate, while trying to time the market or make bets on what stocks will
rise or fall will likely be a waste of money. |
